Hong Kong – is no deal better than a bad one?

Developing countries must recognise their responsibilities as emerging global powers – trade is not a solution alone, says Erica Mann

There has been a negative mood recently ahead of the Hong Kong ministerial conference. I can feel, however, that there is now more of a willingness to achieve something.

The developing countries group, known as the G90, are still frustrated for two main reasons.

First, they do not like the language Peter Mandelson uses when he tries to distinguish between emerging powers and Least Developed Countries (LDCs). But Mandelson is right to do this.

Second, they see no real progress on important products for them such as sugar, cotton and bananas. Two of these (banana and sugar) are relevant to the EU, whereas all three are relevant to the US.

The recent EU agreement on sugar reform went beyond what had been expected and that is very positive. Yes, it is not perfect, but at least there is a common understanding.

I had hoped that the EU would have gone further with its proposals on agricultural trade. But we have to recognise that there is now a compromise that 25 member states support. There is a common understanding of the need to phase out export subsidies and that we should have less domestic support.

Hopefully, what will happen in Hong Kong is that there will be a more positive mood and an understanding as to why the Doha Development Round is so important for everyone. We are living in a global world. It is the first time that we have experienced a situation in which the industrial powers and the LDCs have an equal voice in the round.

But if we have a negative outcome at Hong Kong, I cannot imagine the negotiators will be capable of picking things up in 2006.

Mandelson is also right to insist that we must achieve something on issues such as services and NAMA [non-agricultural market access]. We do not need precise language but there must be a willingness to have more opening.

The aim of the round is primarily to bring developing countries into the world trading system. On the other hand, we have to pay attention to the economic difficulties we are facing in Europe. If we cannot get an agreement on having non-tariff barriers to trade removed, we will lose more jobs, given that we in Europe need to export. There are strong uncertainties in the legal frameworks in China and India that need to be addressed.

Even the more advanced developing countries such as Brazil, India and China have incredibly high proportions of their populations living on less than $1-2 per day. However, the world trend is in their favour, not in ours. We are not losing out at the moment but – with our ageing populations – we need to be careful that our system can sustain itself in the future.

India has said that it expects a growth rate of 12-15% next year. This is good. Yet I can see problems for fragile countries such as the Windward Islands, who are really dependent on only one or two commodities. We cannot solve their problems by trade alone. With bananas, I am always supportive of any changes relevant to poorer countries. But even if everything is perfect there, they will still need aid and special treatment.

Mandelson has argued for special and differential approaches for developing countries, rather than having them all in the same basket. But it will be very difficult to get an agreement on special and differential treatment. This was a proposal raised by the South African negotiator Faizel Ismail. It is not us, but India that opposes the proposal.

I can understand that the G90 countries are frustrated. They wanted to have a truly development-focused round. On the other hand, they must take their responsibilities.

They are now a global power, so they cannot play the role of just being developing countries any more.

German Social-Democrat MEP Erika Mann is a member of the European Parliament’s committee on international trade.

Forcing liberalisation onto developing markets will only serve to increase poverty and the gap between richer and poorer nations, according to non-governmental organisations, trade experts and most governments of the countries themselves.

Next week’s ministerial meeting of the World Trade Organization – the first since talks collapsed without a deal at Cancœn in 2003 – hopes to reach agreement on three key issues: trade in services, as regulated by the General Agreement on Trade in Services (GATS), Non-Agricultural Market Access (NAMA) and agricultural subsidies.

But in each of these three areas, the EU is, in fact, promoting a bad deal for the poor.

By taking an aggressive position on NAMA – and reneging on its earlier position of not demanding the mandatory opening up any service sectors under GATS, the Commission – led by Peter Mandelson – is doing exactly the opposite of what Alan Johnson, the UK trade minister, says he wants. Speaking for the UK presidency, Johnson said: “My first priority for Hong Kong is that we must not force liberalisation on developing countries: this is a development round.”

We’re not being told the full story: either Johnson is trying to divert attention from the fact that the UK’s real agenda is being pursued by Mandelson – or, perhaps worse, the European Commission is refusing to listen to the Council of Ministers any more than it does the European Parliament, but is acting independently to promote a position backed by the European business community rather than our democratically elected politicians.

There is a lamentable lack of democracy in the making of EU trade policy: the European Parliament’s international trade committee doesn’t even have access to either agendas or minutes of the meetings at which ministers and the Commission determine the EU’s trade negotiating position, let alone observer status. Even the negotiating position itself remains confidential, so if it isn’t MEPs or member state governments that are shaping EU trade policy, who is it?

We know that European business has a remarkable access to the Commission: certainly more than the international trade committee and, as the Seattle to Brussels network argued in a report published last week, more than most EU governments.

It states: “Untransparent and complex decision-making structures, highly influential advisory groups and – most of all – the openness of the European Commission all offer corporate lobbyists access to the highest levels of EU policy-making. This privileged access is based on broad consensus among lobbyists and public officials that trade policy should “first and foremost” be made for business.

Whatever the reasons for the divergence between the Commission and Council positions, the price will be borne by the world’s poor. Originally billed as a ‘development round’, current WTO talks are seeking to square the circle of promoting ever-freer international trade and simultaneously delivering developmental benefits to the world’s poor.

If the WTO is to earn any credibility with its critics, the Hong Kong meeting must deliver an end to subsidised export dumping, and an agreement on services that allows developing countries to retain full sovereignty over trade issues, including the ability to determine their own locally appropriate policies on industrial imports and market access.

And it seems the EU’s position on trade, rather than contributing to poverty reduction in Africa, would force developing nations to open up their economies to international competition against their interests and have exactly the opposite effect. One development NGO’s pessimism has already led it to begin campaigning under the slogan ‘No deal is better than a bad deal’.

We know Blair’s days as EU president are numbered – he hands over to Austrian Chancellor Wolfgang Schüssel at the end of the month – but after such an ineffective presidency many are wondering whether he will have achieved any of his objectives by the time he does.

UK Green MEP Caroline Lucas is a member of the Parliament’s committee on international trade.